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Tē tātai i te PAYE mō tētahi utu tōpū Calculate PAYE for a lump sum payment

Payday filing
Payday filing
  • Non-standard filing of employment information
    • Lump sum payments
      • Calculate PAYE for a lump sum payment

Before you start

Do you have employees with CAE EDW NSW ND or tailored tax codes?

Special rules apply.

CAE or EDW tax codes

Do not use the employee's ordinary flat rate. Use the method below for lump sum payments from primary employment.

NSW, ND, or tailored tax codes

Use the rate you usually would for this employee to calculate the PAYE due on the lump sum payment. Do not use the method described below.

Calculate the grossed-up annual value of the employee's income

If the employee is paid more than once a month

Add up the employee’s income payments for the 4 weeks ending on the date of the extra payment. Multiply this number by 13 to calculate the grossed-up annual value of their income.

If the employee is paid once a month

Multiply the employee’s monthly income by 12 to get the grossed-up annual value of their income.

Add the secondary threshold amount for secondary tax code users only

If the employee does not use a secondary tax code

Ignore this step.

If the employee uses a secondary tax code

Add the low threshold amount for their secondary tax code to the grossed-up annual value of their income.

From 1 April 2021

Secondary tax code Low threshold amount
SB $0
S $14,001 
SH $48,001
ST $70,001
SA $180,001

Up to 31 March 2021

Secondary tax code Low threshold amount
SB $0
S $14,001 
SH $48,001
ST $70,001

Calculate the PAYE rate

Add the lump sum payment to the grossed-up annual value of the employee’s income (including their secondary tax code’s low threshold amount, if appropriate). Find the correct row on the table below. The PAYE rate for the lump sum payment is listed alongside.

Most lump sum payments are subject to the ACC earner’s levy. Redundancy payments, retiring allowances and employee share scheme (ESS) benefits are not, regardless of the income source. The ACC levy for 2020-21 tax year is only paid on the first $130,911 earned.

Up to 31 March 2022

Total of lump sum payment and grossed-up annual value of employee's income (including the secondary tax code's low threshold amount, if appropriate) PAYE rate (including 1.39% ACC levy) PAYE rate for redundancy, retiring payments or ESS benefits (excluding 1.39% ACC levy)
$14,000 or less 11.89% 10.50%
from $14,001 to $48,000 18.89% 17.50%
from $48,001 to $70,000 31.39% 30.00%
from $70,001 to $130,911 34.39% 33.00%
More than $130,911 33.00% 33.00%
more than $180,000 39.00% 39.00%

From 1 April 2022

Total of lump sum payment and grossed-up annual value of employee's income (including the secondary tax code's low threshold amount, if appropriate) PAYE rate (including 1.46% ACC levy) PAYE rate for redundancy, retiring payments or ESS benefits (excluding 1.46% ACC levy)
$14,000 or less 11.96% 10.50%
from $14,001 to $48,000 18.96% 17.50%
from $48,001 to $70,000 31.46% 30.00%
from $70,001 to $136,544 34.46% 33.00%
from $136,545 to $180,000 33.00% 33.00%
more than $180,000 39.00% 39.00%

Low PAYE rate notification

If the lowest PAYE rate is applied to the lump sum payment, tick the relevant box on the Employment Information (EI) return.

What happens next

You may also need to deduct student loans or KiwiSaver from a lump sum payment.

Submitting payments separately or together also affects the account type you choose when making a payment to us.

Weekly and fortnightly PAYE deduction tables IR340 2024 (PDF 2MB) Download form
2023 IR340 (PDF 3MB) Download form 2022 IR340 (PDF 2MB) Download guide 2021 IR340 (PDF 818KB) Download guide 2020 IR340 (PDF 623KB) Download guide 2019 IR340 (PDF 598KB) Download guide 2018 IR340 (PDF 613KB) Download guide 2017 IR340 (PDF 634KB) Download guide 2016 IR340 (PDF 611KB) Download guide 2015 IR340 (PDF 702KB) Download guide 2014 IR340 (PDF 678KB) Download guide

Topics

  • Payday filing
  • Lump sum payments

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